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WALL STREET - Merchant Banks
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1762 - Sir Francis Baring established and Francis Baring Company in London; 1806 - Alexander Baring (son) joined firm, renamed Baring Brothers & Co., merged with London offices of Hope & Co. (Alexander worked with Henry Hope); February 26, 1995 - collapsed after trader, Nick Leeson, lost $1.4 billion in futures contracts trading.

Sir Francis Baring (http://www.baringarchive.org.uk/images/dynamic/14.jpg)

1789 - Salomon Oppenheim jr. (17) formed commission and exchange house in Bonn, Germany; focused on shipping industry (traded in oil, wine, linen. tobacco, coffee); 1810 - second largest bank in Cologne (equity capital of 250,000 thalers); 1837 - co-founded Rheinische Eisenbahn (Rhine Railway); 1839 - co-founded Colonia Kölnische Feuerversicherung (Colonia Cologne Fire Insurance); 1852 - co-founded Crédit Mobilier in Paris as Europe's first major incorporated bank; 1853 - involved in founding Darmstädter Bank für Handel und Industrie (Darmstadt Trade and Industry Bank); 1856 - involved in founding International Bank in Luxembourg; 1880 - co-founded Kölnische Unfall-Versicherungs-AG (Cologne Accident Insurance Company; merged with Colonia in 1919); 1904 - converted into commercial limited partnership (Kommanditgesellschaft) after bad investments in electrical industry; Disconto-Gesellschaft, Germany's second largest bank, held stake (until 1919); 1938 - Nazi pressure forced name change to Pferdmenges & Co. (partner Robert Pferdmenges) until 1947; 1947 - co-founded Auto Union, now Audi AG.; 1952 - formed Konsortium für Kurssicherung (Consortium for price hedging) with 27 companies from German iron and steel industry; hedged currency risks in export transactions for consortium members; 1970 - numerous insurance companies merged, formed Colonia Versicherung AG (Colonia Insurance Company); Sal. Oppenheim as majority shareholder of second largest German insurance group; 1989 - converted into partnership limited by shares (Kommanditgesellschaft auf Aktien); 1999 - defined core business as asset management, investment banking; largely withdrew from commercial lending activities; 2005 - acquired Frankfurt BHF-Bank AG, became Europe's largest independent private bank; March 2010 - acquired by Deutsche Bank; ceased investment banking operations.

January 11, 1796 - Henri Hentsch established Hy Hentsch & Cie in Geneva, Switzerland, silk-trading and commission business; June 19, 1798 - joined with Jean Gédéon Lombard (second cousin), established Henri Hentsch & Lombard, "commissions operations" (exchange transactions necessitated by multiple currencies in use); 1830 - Jean-Eloi Lombard took over Bank’s internal development; Charles and Albert Hentsch (sons) continued work of their father; Charles Odier, new Partner, managed international financing operations (maritime, river transport and in railway sector); mid-19th century - Alexis Lombard, James Odier took over management of Firm; 1857 - co-founded Geneva Stock Exchange; 1907 - co-founded Swiss National Bank; 1872 - James Odier, Jules Darier-Rey founded "La Genevoise", first local life insurance company; 1914 - Emile Odier, Albert Lombard, Jean Lombard, Edmond Odier managed Firm; 1919 - among first to establish pension fund for employees; 1951 - Marcel Odier expanded, first private bank to set up outside Switzerland (in Montreal); 1979 - first European bank to own seat on New York Stock Exchange; 2002 - renamed Lombard Odier Darier Hentsch & Cie; 2010 - seventh generation of Hentsch family; active in nearly 20 countries with about 1,900 employees; Geneva's oldest firm of private bankers, one of largest in Switzerland and Europe.

1798 - Moses Marcus and Gerson opened Warburg bank in Hamburg (M.M.Warburg & Co), laid foundations for banking dynasty; 1934 - Siegmund Warburg fled oppression of Nazi regime, settled in London; 1946 - founded, built S.G. Warburg; 1994 - acquired by Swiss Bank Corporation (SBC), renamed SBC Warburg - A Division of Swiss Bank Corporation".

- Irish merchant Alexander Brown established business in Baltimore, MD; imported Irish linen, exported cotton, tobacco to Britain; 1810 - William Brown (oldest son of Alexander Brown) established import/export business in Liverpool, under the name William Brown & Co.; 1818 - Son of Alexander Brown opened Philadelphia office of Liverpool merchant bank, Brown Brothers & Co.; 1825 - Joseph Shipley joined to finance merchants shipping goods between Britain, United States, many other parts of Europe, the Americas; pioneered payment through 'Letters of Credit'; 1837 - name changed to Brown Shipley & Co.; 1863 - London office opened, business focused largely on Acceptance Credits, foreign exchange business, deposit banking; 1918 - partnership between Brown Shipley and its American partners, Brown Brothers & Co., ended, although each continues to act as agents for the other; firm built substantial business in the wool, timber, fur trades; 1946 - made transition to incorporation as limited company; January 1, 1931 - W. A. Harriman & Co. merged with Brown Brothers; Prescott Bush - Managing Partner; 1957 - leading member of Acceptance Houses Association, prominent role in London Money Market; developed 'Investment Advisory Service'; 1992 - acquired by European bank KBL European Private Bankers; 2005 - owned directly by new KBC Group NV, one of Europe's largest financial companies.

October 17, 1890 - Ludwig Hirschhorn established Hirschhorn & Grun established in Zurich, Switzerland; 1896 - Julius Bear (nee Bar) joined firm; dissolved, renamed Hirschhorn, Ulm & Baer; April 23, 1901 - assets/liabilities acquierd by Julius Baer & Co., limited partnership (after death of Hirschhorn); May 1, 1901 - firm became member of Zurich Stock Exchange; March 17, 1918 - published first issue of "Wochenbericht" (research report for banks; discontinued December 2005); January 1, 1934 - Walter J. Baer one of founding members of Swiss Private Bankers Association; November 27, 1940 - established Baer Custodian Corporation in New York; December 10, 1965 - established Julius Baer Foundation; March 10, 1970 - launched Baerbond (its first Swiss investment fund); November 27, 1974 - established Julius Baer & Co.  (Holding) Ltd.; Julius Baer & Co. assets transferred to Bank Julius Baer & Co. Ltd.; April 15, 1980 - Baer Hiolding Ltd. went public; February 4, 1983 - established Julius Baer Investment Management Inc. (licensed by SEC on April 13, 1983); April 2, 1984 - opened branch in New York (under Federal Charter from International Banking Act); February 12, 1986 - acquired 51% of Societe Bancaire in Geneva (completed in 1997); 1996 - renamed Julius Baer Holding Ltd., instituted division-based management structure; October 10, 2003 - withdrew from institutional brokerage business, focused on asset management.

1963 - Lewis B. Cullman did first LBO: $62.4 million purchase of Orkin Exterminating With a $1,000 investment.

1970s - "bootstrap" deals; 1980's - leveraged buyouts; 1990s -private equity".

1985 - Peter G. Peterson (former Lehman Brothers senior partner), Stephen Schwarzman  founded Blackstone Group with $400,00 in capital; June 21, 2007 - went public; biggest offering since Google (2004).

September 23, 1998 - 16 major financial institutions, investors in and lenders to Long Term Capital Management (LTCM)  met at New York Federal Reserve Bank to determine capital contributions required bail LTCM out - about $$3.5 billion in return for substantially diluting existing shareholders' stake in LTCM. Control of the firm passed from the current management to a committee determined from the outside by the new investors.

January 25, 2008 - World Economic Forum results of a yearlong study of 5,000 private equity transactions (randomly chosen) from 1980 through 2005 to determine whether buyouts create jobs or result in more layoffs (Economic Impact of Private Equity): 1)  private equity does not create more jobs, but cut, on average, only about 1% more jobs than peers, 2) two years before buyout, a company cuts, on average, 4% more of its work force compared with peers (possibly because preparing for sale), 3) acquired companies, on average, cut 7% of work force over 2 years, but at same time, added jobs (usually new positions in new locations) at pace of about 6%, resulting in a net loss of 1%, 4) by 4th, 5th years of private equity ownership, growth of  company’s work force became similar to its public peers, 5) 6% of all buyouts eventually end in bankruptcy filing, slightly higher than average for public companies (buyout companies defaulted at half rate compared with public companies with similar junk debt ratings), 6) public-to-private transactions reflected only 6.7% of total number of buyouts since 1980 (28% of firms acquired, measured in terms of dollar value). The study did not look at new or lost jobs abroad, did not examine what would have happened to employment had  buyouts not occurred.

Results contrasted with study commissioned by Private Equity Council (lobby group) of 42 large companies (selected by buyout groups) acquired by 8 private equity firms from 2002 to 2005 (World Economic Forum data did not look at deals from 2003 to 2005); results showed that employment grew 8.4% at  acquired companies.


September 2008 - Private equity deals decline


(ABN AMRO Bank), Jeroen Smit; [translated by Donald Gardner ... et al.] (2010). The Perfect Prey: The Fall of ABN Amro, or What Went Wrong in the Banking Industry. (Amsterdam, Netherlands: Prometheus, 431 p.). Editor-in-Chief and Publisher of the Business Weekly (FEM Business). ABN AMRO Bank; Banks and banking --Netherlands; Bank mergers --Netherlands; Bank failures --Netherlands; Global Financial Crisis, 2008-2009. October 9, 2007 - Royal Bank of Scotland (RBS) completed biggest deal in banking history, record 71 billion euros acquisition of Dutch bank ABN Amro; dismantled ABN Amro, Holland's number one bank ceased to exist; Netherlands lost bank at heart of economy for 183 years; 2008 - RBS forced into largest rights issue in British corporate history, underwritten by Government;  ABN Amro - toxic, rotten core disguised by paper profits of billions every year; one of Europe's largest, longest established banks - from powerful predator to perfect prey in little more than decade.

(Baring), Ralph W. Hidy (1970). The House of Baring in American Trade and Finance; English Merchant Bankers at Work, 1763-1861. (New York, NY: Russell & Russell, 631 p. [orig pub. 1949]). Baring Brothers & Co.; Investments, British--United States.

(Baring), Philip Ziegler (1988). The Sixth Great Power: A History of One of the Greatest of All Banking Families, the House of Barings, 1762-1929. (New York, NY: Knopf, 430 p.). Baring Brothers & Co. Ltd.--History; Merchant banks--Great Britain--History.

(Baring), Helga Drummond (2008). The Dynamics of Organizational Collapse: The Case of Barings Bank. (New York, NY: Routledge, 143 p.). Professor, Organisational Learning, Behaviour and Change, University of Liverpool Management School. Leeson, Nicholas William; Barings Bank; Bank failures -- Great Britain; Merchant banks -- Great Britain; Organizational behavior -- Case studies; Corporate culture -- Case studies; Organizational effectiveness -- Case studies. High-level, multi-theoretical analyses, psychological and sociological theories to explore events of Nick Leeson’s employment with Barings' in Singapore in 1992 to Barings' collapse in 1995.

(Blackstone Group), Peter Peterson (2009). The Education of an American Dreamer: How a Son of Greek Immigrants Learned His Way from a Nebraska Diner to Washington, Wall Street, and Beyond. (New York, NY: Twelve, 448 p.). Chairman of Blackstone Group, Chairman Emeritus of the Council on Foreign Relations and founding Chairman of the Peterson Institute for International Economics. Peterson, Peter G.; Peterson family; Greek Americans --Biography; Businessmen --United States --Biography. Family, love, business, politics, ambition, idealism, failure, fulfillment; marriage and family hardship; lessons in political gamesmanship; thoughts on obsessive desire to succeed; learning the meaning of "enough"; son of Greek immigrants who ran diner in Kearny, NB; Chicago advertising days (1950s), youngest CEO of Fortune 300 Company (Bell & Howell, Secretary of Commerce (youngest Cabinet member) in Nixon's White House, turnaround and tumultuous days of Lehman Brothers, creation of The Blackstone Group; establishment of Peter G. Peterson Foundation to do something about America's politically untouchable challenges that threaten America's future (massive entitlement obligations, ballooning health care costs, energy gluttont.

Peter Peterson - Blackstone Group (http://www.pgpf.org/Issues/Fiscal-Outlook/2011/06/~/media/BCC7B099945B4AF496D1E2073656757A.ashx?w=250&as=1&h=348)

Steve Schwarzman - Blackstone Group (http://www.blackstone.com/images/bx-people/schwarzman_stephen_web.jpg?Status=Master&sfvrsn=2)

(Blackstone Group), David Carey and John E. Morris (2010). King of Capital: The Remarkable Rise, Fall, and Rise Again of Steve Schwarzman and Blackstone. (New York, NY: Crown Publishers, 336 p.). Senior Writer for The Deal; Former Assistant Managing Editor at The Deal. Blackstone Group; Private equity; Consolidation and merger of corporations; Leveraged buyouts; Financial services industry --United States; Investment advisors --United States. How Blackstone (and other private equity firms) transformed from gamblers, hostile-takeover artists, 'barbarians at the gate' into disciplined, risk-conscious investors; from two guys, secretary to one of Wall Street’s most powerful institutions; far outgrew older rival KKR; how Steve Schwarzman came to epitomize spectacular new financial fortunes amassed in 2000s (pay one year of $398 million, $684 million from Blackstone IPO).

(Brown Brothers & Company), John Cosby Brown (1978). A Hundred Years of Merchant Banking, a History of Brown Brothers and Company, Brown, Shipley & Company and the Allied Firms. (New York, NY: Arno Press, 374 p. [orig. pub. 1909]). Brown Brothers & Company--History; Merchant banks--United States--History; Merchant banks--Great Britain--History.

(Brown Brothers), John A. Kouwenhoven (1983). Partners in Banking: An Historical Portrait of a Great Private Bank, Brown Brothers, Harriman & Co., 1818-1968. (Garden City, NY: Doubleday, 248 p. [2nd ed.]). Brown Brothers, Harriman & Co.--History.

(Brown Shipley & Co.), Aytoun Ellis (1960). Heir of Adventure: The Story of Brown, Shipley & Co. Merchant Bankers 1810-1960. (London, UK: Brown, Shipley & Co. Ltd., 165 p.). Brown, Shipley & Co. Ltd.; Merchant banks--Great Britain. 150th anniversary of the company.

(Charterhouse Group), Laurie Dennett (1979). The Charterhouse Group 1925-1979: A History. (London, UK: Gentry, 175 p.). Charterhouse Group -- History; Great Britain Holding companies.

(Conrad Hinrich Donner), Bruno W.F. Andresen (1984). Mit Stehpult und Tintenfass: Erinnerungen aus dem Kontor einer Hamburger Merchant-Bank. (Hamgurg, GER: Christians, 239 p.). Conrad Hinrich Donner (Firm)--History; Merchant banks--Germany (West)--History.

(Jay Cooke & Co.), Henrietta M. Larson (1968). Jay Cooke, Private Banker. (New York, NY: Greenwood Press, 512 p. [orig. pub. 1936]). Cooke, Jay, 1821-1905; Banks and banking--United States--History.

Jay Cooke (http://www.libraries.psu.edu/content/psul/digital/ogontz/photos/_jcr_content/openpar/textimage_psul_9/ image.img.jpg/1312571019324.jpg)

(Cullman Ventures Inc.), Lewis B. Cullman (2004). Can’t Take It with You: The Art of Making and Giving Money. (Hoboken, NJ: Wiley, 224 p.). Cullman, Lewis B., 1919- ; Businessmen--United States--Biography; Philanthropists--United States--Biography. Originated the LBO in 1963 with the leveraged buyout of Orkin Exterminating Co. (engineered the $62.4 million purchase of Orkin Exterminating with $1,000 investment); amassed fortune via LBOs.

(Glyn, Mills & Co.), Roger Fulford (1953). Glyn’s, 1753-1953. Six Generations in Lombard Street. (London, UK: Macmillan, 266 p.). Glyn Mills & Co.; Merchant banks--Great Britain--History.

(Hambro), Bo Bramsen and Kathleen Wain (1979). The Hambros, 1779-1979. (London, UK: Joseph, 457 p.). Hambro family.

(Indosuez), Hubert Bonin (1987). Indosuez: L'autre Grande B anque D'affaires. (Paris, FR: Economica, 141 p.). Indosuez (Firm : France)--History; Merchant banks--France--History.

(Kleinwort Benson), Jehanne Wake (1997). Kleinwort, Benson: A History of Two Families in Banking. (New York, NY: Clarendon Press. Kleinwort Benson Lonsdale (Firm); Bankers--Europe--Biography; Merchants--Europe--Biography; Kleinwort family; Benson family; Merchant banks--Europe--History; Germany--Genealogy; Great Britain--Genealogy.

Knowles & Foster), Ted Kavanagh (1948). The History of Knowles & Foster, 1828-1948. (1948 - London, UK: T. Kavanagh Associated, 92 p.). Knowles & Foster (Firm); Business enterprises. 1826 - started in Brazilian trade; 1828 - founded as Foster Brothers; 1853 - renamed Knowles & Foster; specialized in trade between Britain, Portugal, Brazil; Thomas Foster Knowles most active partner (1878-1939); appointed, at various times, bankers to Portugese Royal Family, to Brazilian Emperor; created English Bank of Rio de Janeiro, acted as directors of London and River Plate Bank; 1886 - Rio Flour Mills Co. - best known venture

(Kohlberg Kravis Roberts), Sarah Bartlett (1991). The Money Machine: How KKR Manufactured Power & Profits. (New York, NY: Warner Books, 345 p.). Kohlberg Kravis Roberts & Co.--History; Consolidation and merger of corporations--United States--Finance; Leveraged buyouts--United States.

Henry Kravis (http://www.forbes.com/images/ 2001/03/23/kravis_190x150.jpg)

(Kohlberg Kravis Roberts), George Anders (1992). Merchants of Debt: KKR and the Mortgaging of American Business. (New York, NY: Basic Books, 328 p.). Reporter (Wall Street Journal). Kohlberg Kravis Roberts & Co.--History; Consolidation and merger of corporations--United States--Finance; Leveraged buyouts--United States.

(Kohlberg Kravis Roberts), George P. Baker and George D. Smith (1998). The New Finance Capitalists: Kohlberg Kravis Roberts and the Creation of Corporate Value. (New York, NY: Cambridge University Press, 257 p.). Economist and Historian, respectively. Kohlberg Kravis Roberts & Co.; Consolidation and merger of corporations--United States--Finance; Leveraged buyouts--United States.

(Morgan Grenfell), Kathleen Burk (1989). Morgan Grenfell, 1838-1988: The Biography of a Merchant Bank. (New York, NY: Oxford University Press, 348 p.). Morgan Grenfell & Co.--History; Merchant banks--Great Britain--History.

(Morgan Grenfell), Dominic Hobson (1990). The Pride of Lucifer: Morgan Grenfell, 1838-1988: The Unauthorised Biography of a Merchant Bank. (London, UK: Hamish Hamilton, 482 p.). Morgan Grenfell & Co.--History; Merchant banks--Great Britain--History.

(Paribas), M’hamed Sagou; preface de Jean-Marie Chevalier (1981). Paribas, Anatomie d’Une Puissance. (Paris, FR: Presses de la Fondation Nationale des Sciences Politiques, 245 p.). Paribas (Firm).

(Paribas), Jean Baumier (1988). La Galaxie Paribas. (Paris, FR: Plon, 273 p.). Paribas (Firm)--History; Banks and banking--France--History.

(Paribas), Eric Bussiere (1992). Paribas: Europe and the World, 1872-1992. (Paris, FR: Fonds Mercator,    p.). Paribas (Firm).

(Paribas), Frederic Lordon (2002). La Politique du Capital. (Paris, FR: Odile Jacob, 347 p.). Banque Nationale de Paris; Paribas (Firm); Bank mergers--France.

(Schroders), Richard Roberts (1992). Schroders, Merchants & Bankers. (Basingstoke, UK: Macmillan, 616 p.). Schroeder family; J.-F.-Schröder-Bank--History; Bankers--History; Merchant banks--History; Investment banking--History.

(Tricontinental Holdings Limited), Hugo Armstrong and Dick Gross (1995). Tricontinental: The Rise and Fall of a Merchant Bank. (Carlton, VIC: Melbourne University Press, 333 p.). Victoria. Royal Commission into the Tricontinental Group of Companies; Tricontinental Holdings Limited; Merchant banks--Australia--Victoria; Bank failures--Australia--Victoria.

(M. M. Warburg), Eduard Rosenbaum (1979). M. M. Warburg & Co., 1798-1938, Merchant Bankers of Hamburg. (New York, NY: Holmes & Meier Publications, 190 p.). M.M. Warburg & Co.

(M. M. Warburg), Eckart Klessmann (1998). M.M. Warburg & Co.: Die Geschichte eines Bankhauses. (Hamburg, Germany: Dolling und Galitz, 2025 p.). M.M. Warburg & Co.--History; Banks and banking--Germany--Hamburg--History.

(S. G. Warburg & Co.), Niall Ferguson (2010). High Financier: The Lives and Time of Siegmund Warburg. (New York : Penguin Press, 576 p.). Laurence A. Tisch Professor of History (Harvard University), a Senior Research Fellow (Jesus College, Oxford University), and a Senior Fellow at the Hoover Institution (Stanford University). Warburg, Siegmund, Sir, 1902-1982; Jewish bankers --Biography; Bankers --Great Britain --Biography. Refugee from Hitler's Germany, became dominant figure in postwar City of London, one of architects of European financial integration; near collapse, "Aryanization" of his family's long-established bank in 1930s; frustrated by stagnation of Kuhn Loeb in 1950s; resolved that S. G. Warburg (founded in 1946) would be different; embodied ideals of haute banquet-high finance - always eschewed fast buck in favor of gilt-edged advice; financial innovator (engineered Britain's first hostile takeover), pioneer of European economic integration (helped invent Eurobond), prophet of globalization, paragon of fiscal rectitude, key behind-the-scenes adviser to governments in London, Tokyo, Jerusalem; complex and ambivalent man.

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